Thursday, December 19, 2024

Volkswagen de México reaches agreement with union on 8.1% pay raise

German car manufacturer Volkswagen has averted a strike at its Mexican plant in the city of Puebla by agreeing to an 8.1% pay rise with the company’s union.

Volkswagen’s deal with the Independent Union of Workers of the Volkswagen Automotive Industry (Sitiavw) included both an 8.1% salary rise and a 0.5% increase to the workers’ savings fund.

Puebla's Volkswagen manufacturing plant
Puebla’s Volkswagen manufacturing plant, which has been in operation for 55 years. (Volkswagen México)

The agreement was reached after nearly 7,000 unionized workers called for a strike on Friday, having initially demanded a pay increase of 15.7% on Aug. 9.

“At Volkswagen de México we are convinced that dialogue is the vehicle to reach agreements like this, which protect the purchasing power of our staff in a post-pandemic environment that continues to present challenges for the economy and the automotive industry,” said Ricardo Guerrero, the company’s vice president of human resources.

The deal comes on the back of a 9% raise agreed in 2022, which workers at the plant initially rejected. It is the latest of several such deals made across Mexico’s automotive sector over the last year, in the context of high inflation.

In March, General Motors agreed to a 10% pay raise for workers at its pickup truck factory in Guanajuato, the first double-digit salary increase in the sector for many years. Independent unions also negotiated raises of 9.4% at Audi and 9% at Nissan.

Sitiavw representatives
Representatives of the Sitiavw union, who negotiated the pay increase for workers. (Centro Federal de Conciliación y Registro Laboral/X)

These successive pay increases reflect increased monitoring of Mexico’s labor unions since the country’s 2019 Labor Reform, which tightened protections on collective bargaining. The reform was a condition of Mexico’s entry into the United States-Mexico-Canada Trade Agreement (USMCA) free trade pact, and has also been hailed as an important advancement in Mexican labor policy.

Volkswagen is one of Mexico’s leading car manufacturers, producing 300,000 vehicles in the country in 2022. Its Puebla plant has been in operation for 55 years and is one of the company’s largest production centers.

“The willingness and openness shown by the negotiating commissions, together with the accompaniment of the officials of the Federal Center for Conciliation and Labor Registration, made it possible to conclude the process successfully,” Guerrero said.

With reports from Forbes and Investing

Have something to say? Paid Subscribers get all access to make & read comments.
U.S. Ambassador to Mexico Ken Salazar and U.S. Bureau of Overseas Building Operations Director William H. Moser together pull a blue cloth off to reveal a metal plaque bearing the name "Embassy of the United States of America" and the logo of the U.S. Department of State.

Ambassador unveils new billion-dollar US embassy in Mexico City

2
While a plaque unveiled at Tuesday's ceremony features the name of U.S. President Joe Biden, the embassy will officially open after Trump assumes office in 2025.
Stellantis N.V. is a multinational automotive manufacturing company formed from the merger in 2021 of the Italian–American conglomerate Fiat Chrysler Automobiles (FCA) and the French PSA Group.

Stellantis prepares new investments in Mexico in 2025

0
Stellantis' investment will boost production at its Coahuila facility to nearly 1 million vehicle engines, the company said.
Black two way communication radios with labels on each bearing a different number written in marker, lying on a table on display.

Nearly 100 municipal police officers arrested in Comitán, Chiapas

4
State officials arrested the 92 Comitán officers after they tried to stop a state police drug raid. In a separate incident, 13 Veracruz state police were arrested on kidnapping charges.